DISCONTINUED MODEL ANALYSIS

LEVERAGING DATA & ANALYTICS TO UNDERSTAND DISCONTINUED VEHICLE RETENTION TRENDS

Car and truck models come and go. Some have staying power The purpose of this analysis is to better understand the reasons and evolve into nostalgic brands that stand the test of time why the following models were discontinued, as well as the over several decades. Others, even with a hint of nostalgia, are rationale of how they retained value in the years following their forced to be retired due to changing consumer preferences or a retirement. manufacturer production strategy shift. In the analysis, Black Book calculated the retention of each With the recent announcements of manufacturer plans to vehicle model just prior to discontinuation and three years discontinue certain vehicle models in the coming years, such after discontinuation. Retention was calculated using Black as Ford, Black Book analyzed retention trends of other popular Book Wholesale Average value of a three-year old vehicle vehicles that have been discontinued over the years. as percent of original typically-equipped MSRP. The average Following is a thorough analysis from Black Book that reviews retention was also calculated for each vehicle’s segment a handful of popular models that were discontinued in recent by including all vehicles in that segment. The net change in history. This analysis includes a mix of small- and mid-size retention variance of the model against its segment, pre- cars, trucks, SUVs and . Their discontinuation dates versus post-discontinuation, was measured to determine if the vary over the last few decades, and the reasons for their discontinued model performed better (positive net change) or discontinuation are as diverse as the vehicles themselves. worse (negative net change).

DISCONTINUED MODEL ANALYSIS

Net Change in Model Retention Against its Vehicle Segment Pre- vs Post-Model Discontinuation -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30%

Mazda MPV Milan Ford Crown Victoria Saturn Ion Saa b 9-5 G6 Ford Ranger Mitsubishi Galant Honda Element Nissan Xterra Hummer H2 Toyota FJ Cruiser Model Retention

Segment Retention

The MPV was a , but with a sporty character. It did very well in retaining value against other minivans before it Mazda MPV was discontinued. Afterwards, its customers moved towards 50% crossovers and SUVs. As its fan base dwindled, the models lost value faster than the rest of the Minivan segment. The last 40% model year was 2006. Pre-discontinuation, Mazda MPV was 10 points better in three-year retention value (as percent of 30% MSRP) against its segment. Post-discontinuation, the model performance was 6 points worse in comparison to segment 20% retention. As a result, the net in three-year retention pre- vs 10% post-discontinuation for the Mazda MPV was 16 percentage Pre-Discontinuation Post-Discontinuation points worse than its segment’s average.

Ford decided to discontinue the Mercury brand as it trimmed Mercury Milan its number of offerings post-recession. There was always 60% much confusion as to what Mercury was: a more expensive Ford or a less expensive Lincoln. Ultimately neither side won 50% out, and Mercury was discontinued in favor of focusing on main line Ford and upmarket Lincoln. The Mercury Milan had 40% little differentiation from its cousin, the . With the parent brand gone, the Mercury Milan declined in value steeply. 30% The last model year was 2011. The net change in three-year retention pre- vs post-discontinuation for Mercury Milan was 20% 10 percentage points worse than the Mid-Size Car segment’s Pre-Discontinuation Post-Discontinuation average.

The Ford Crown Victoria was Ford’s large car offering, and in its commercial form was a favorite police car and taxi car as it Ford Crown Victoria had a large interior and massive trunk space to accommodate 60% law enforcement equipment and luggage. As its police customer base moved on to SUVs and taxi cabs lost ground to 50% ride-sharing, the Crown Vic lost market value. The last model year was 2011. The net change in three-year retention pre- vs 40% post-discontinuation for Ford Crown Victoria was 5 percentage points worse than the Full-Size Car segment’s average. 30%

20% Pre-Discontinuation Post-Discontinuation

GM introduced Saturn as an American alternative to imported Saturn Ion cars with the slogan “a different kind of car, a different kind of 60% company”. One-price selling was aimed at creating a hassle- free buying experience. The Saturn Ion was a 50% sold between 2003 and 2007. The dent resistant plastic body paneled Ion saw its last production in model year 2007. It was 40% replaced by the rebadged European . Towards the end, Saturn lost its brand identity. As investment dwindled, 30% the brand was discontinued. The net change in three-year retention for Saturn Ion was 3 percentage points worse than 20% the Compact Car segment. Pre-Discontinuation Post-Discontinuation Model Retention

Segment Retention

The Saab 9-5 was a luxury car produced by the Swedish automaker. Saab was an iconic brand with a mass-market Saab 9-5 luxury appeal, but overall production volumes remained small. 60% Saab declared bankruptcy in 2011. Saab owners had strong feelings for the brand, especially the iconic 900. Despite the 50% likely issue of parts availability problems, the 9-5 did relatively well against its peer group. The net change in three-year 40% retention pre- vs post-discontinuation for Saab 9-5 was only 1 percentage point worse than the rest of the Luxury Car 30% segment. 20% Pre-Discontinuation Post-Discontinuation

Pontiac was historically positioned to appeal to upscale Pontiac G6 performance enthusiasts, and retained a few niche vehicles 60% like the GTO and Firebird. The Pontiac G6 was a sporty replacement for Grand Am, and carried most of the brand’s 50% sales volume. Die-hard Pontiac enthusiasts kept G6 values strong well after its discontinuation. The last model year for 40% Pontiac G6 was 2010. The net change in three-year retention pre- vs post-discontinuation for Pontiac G6 was only 1 30% percentage point worse than the Mid-Size Car segment’s average. 20% Pre-Discontinuation Post-Discontinuation

The Ford Ranger sold well over 300,000 units annually in its heyday. As sales volume shrank on Small Pickups, Ford Ford Ranger discontinued it in 2011, hoping that the buyers will switch 80% to the full-size pickup, F150. Given the renewed interest in pickup trucks, Ford is bringing the Ranger back in 2019. As 70% the competition in the segment declined substantially, Ford Ranger improved in three-year retention by 9 points after 60% discontinuation, much like the Small Pickup segment which improved by 10 points on average. The net change was only 50% one point worse for the Ranger. 40% Pre-Discontinuation Post-Discontinuation

The Mitsubishi Galant was priced competitively in its Mitsubishi Galant segment of Mid-Size Car. As sales slowed, Mitsubishi invested 60% in electrification. However, its typical buyers were not yet ready for electric vehicles, which at the time were considerably more 50% expensive than their gasoline counterparts. Young buyers were attracted to the Galant’s pricing, and it did relatively well after 40% being discontinued. The last model year was 2012. The net change in three-year retention pre- vs post-discontinuation for 30% Mitsubishi Galant was 1 percentage point better than the Mid- Size Car segment’s average. 20% Pre-Discontinuation Post-Discontinuation Model Retention

Segment Retention

The Honda Element made boxy designs cool. It combined the attributes of a SUV, pickup, and a camper. It has the Honda Element capacity of a small moving van and you could sleep in it with 80% seats reclining absolutely flat. There was no carpeting and it could be hosed clean. This unique “active lifestyle” vehicle 70% was discontinued in 2011 as sales declined. Ironically, it was more popular with the older demographic than the younger 60% one marketers were aiming at. The net change in three-year retention pre- vs post-discontinuation for Honda Element was 50% 5 percentage points better than the Compact /SUV segment. 40% Pre-Discontinuation Post-Discontinuation

The Nissan Xterra was a true body-on-frame SUV with Nissan Xterra impressive off-road capability. It was axed in 2014 after a 70% successful 15-year run. The “on road” focused Nissan Rogue, which outsold the Xterra by a huge margin, received more 60% updates and investment. However, the rugged Xterra had a niche following among off-road enthusiasts. As the production 50% of car based crossovers became more common, the longing for a legitimate off-road vehicle like the Xterra remained. The 40% net change in three-year retention pre- vs post-discontinuation for Nissan Xterra was 10 percentage points better than the 30% Compact Crossover/SUV segment. Pre-Discontinuation Post-Discontinuation

The Hummer H2 combined the luxury of an SUV with the cargo capacity of a pickup. Based on existing Chevrolet running Hummer H2 gear, it was a more affordable and user-friendly vehicle than the 80% military-derived H1. It was a very capable off-road, but when the recession hit and gas-guzzling vehicles were no longer chic, 70% GM discontinued it after 2009 model year. However, a niche customer base created a strong demand for this vehicle, with 60% no alternative of such outrageousness available in the market. The H2 showed a significant improvement after discontinuation 50% in its three-year retention by 19 points over the performance of the Full-Size Luxury CUV/SUV market. 40% Pre-Discontinuation Post-Discontinuation

The Toyota FJ Cruiser was acclaimed for its off-road Toyota FJ Cruiser performance and throwback styling. The wide stance and 100% short made it look quirky, yet capable. In 2014, its last model year of production, it sold only about 14,000 90% units. Given the uniqueness of this vehicle, and the relative 80% high demand from enthusiasts, it became a modern-day collectible. The net change in three-year retention for Toyota FJ 70% Cruiser after discontinuation was a whopping 26 percentage 60% points better than the average of the Mid-Size Crossover/SUV segment. 50% Pre-Discontinuation Post-Discontinuation

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